New York’s top lawyer failed to establish enough evidence that ExxonMobil violated laws in connection with its public disclosures to account for “past, present and future climate change risks,” a state Supreme Court judge ruled Tuesday.
The investigation of the supermajor, which has been ongoing for more than four years, ended in defeat for New York Attorney General (AG) Letitia James. New York Supreme Court Judge Barry R. Ostrager wrote Tuesday that the state had “failed to establish by a preponderance of evidence” that ExxonMobil had violated the state’s Martin Act or executive law in People of the State of New York et al v. Exxon Mobil Corp. (No. 452044-2018).
“What the evidence at trial revealed is that ExxonMobil executives and employees were uniformly committed to rigorously discharging their duties in the most comprehensive and meticulous manner possible,” Ostrager wrote. “The testimony of these witnesses demonstrated that ExxonMobil has a culture of disciplined analysis, planning, accounting and reporting.”
ExxonMobil was required to produce millions of pages of documents and dozens of witnesses for interviews and depositions, the judge noted. The Irving, TX-based supermajor also produced voluntarily at the court’s direction “reams of proprietary information relating to its historic and contemplated investments. In addition, multiple nonparties, including various financial institutions, were interviewed or deposed.”
James and her office had made public “scores of proprietary internal models and memoranda ExxonMobil used in connection with the planning and operation of its business,” Ostrager noted. “Significantly, many of the internal models published at trial related to projects that ExxonMobil either has not yet pursued or may never pursue.”
The judge said nothing in his opinion was “intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products.
“ExxonMobil does not dispute either that its operations produce greenhouse gases or that greenhouse gases contribute to climate change. But ExxonMobil is in the business of producing energy, and this is a securities fraud case, not a climate change case.”
The AG’s office relied only on its claims that ExxonMobil had made materially false disclosures to the public in violation of New York’s Martin Act, which was enacted in 1921 and which gives the AG extraordinary powers and discretion to investigate financial fraud, exceeding those given any regulator in any other U.S. state.
The state had sought to require ExxonMobil to pay between $476 million and $1.6 billion in restitution to shareholders.
Ostrager’s ruling “affirms the position ExxonMobil has held throughout the New York Attorney General’s baseless investigation,” the supermajor said in response. “We provided our investors with accurate information on the risks of climate change. The court agreed that the attorney general failed to make a case, even with the extremely low threshold of the Martin Act in its favor.
“Lawsuits that waste millions of dollars of taxpayer money do nothing to advance meaningful actions that reduce the risks of climate change. ExxonMobil will continue to invest in researching breakthrough technologies to reduce emissions while meeting society’s growing demand for energy.”
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